Cambior production, shares higher

Improved mill throughput at the Rosebel mine in Suriname helped Cambior (CBJ-T) boost its first-quarter gold production by 10% from the year-earlier period.

During the first three months of 2005, Rosebel’s mill managed to run through around 1.8 million tonnes of ore averaging 1.55 grams gold per tonne. That rate translates to about 20,400 tonnes per day, and eclipses the previous record by 3,200 tonnes, or nearly 20%.

In the end, Rosebel produced 87,950 oz. of gold, more than tripling year-ago production (the mine began producing in February 2004), but about 6% lower than the record output of 93,300 oz. during the last stanza of 2004. Milled gold grades in the fourth quarter averaged 1.9 grams owing to high grading, a practise Cambior says it will abandon now that the processing rate is up to speed.

Cambior also says that gravity recovery improved to average 40% during the recent quarter. That combined with improvement in the stripping circuit allowed Rosebel to reduce its gold-in-circuit inventory by 2,000 oz.

Meanwhile, Cambior recently commissioned the operation’s effluent treatment plant; the primary crusher, stacker, and conveyor system are slated for completion in June, a month ahead of schedule. The company figures the ongoing second phase of construction could come in $2 million cheaper than originally estimated.

In neighbouring Guyana, the Omai mine managed to squeeze 34,260 oz. of gold out of 1.3 million tonnes of stockpiled material running 0.9 gram gold. A year earlier, Omai produced 72,000 oz. of gold; the mine spat out 43,000 oz. during the fourth quarter of 2004. Recovery rates at Omai, which is slated to close in August, have been hovering just above 90%.

In Quebec, the Doyon Division chipped in 37,100 oz. from underground sources only during the first quarter. That represents an improvement over the previous quarter but is well off the year-ago pace. The year-over-year production shortfall is owing to ground stability problems in mid-2004 that forced a 30% reduction in the underground mining rate. The problems also forced Cambior to book a US$71.2-million writedown of the Doyon mine during the fourth quarter.

Cambior’s half-interest in the Sleeping Giant mine, also in Quebec, netted it 7,150 oz. of gold, slightly lower than the year-ago period and previous quarter, as the operation milled fewer tonnes. Cambior is currently preparing new production areas on three new levels reached via a deepening program. Aurizon Mines (ARZ-T) owns the other half of the Sleeping Giant mine.

All told, Cambior poured 166,460 oz. of gold during the first quarter; the company expects to churn out some 621,000 oz. at a mine operating cost of US$250 per oz. during 2005.

“We are not aware of any negative factors that would preclude us from meeting or exceeding our remaining objectives," said Cambior CEO Louis Gignac in a prepared statement. Gignac also said that the company has "reduced" its efforts towards acquisitions, instead preferring to focus on its internal projects.

Shares in Cambior climbed as much as 26, or 11.5%, to $2.53 in early trading in Toronto following the news on April 13.